Associations Say Some Policy Proposals Will Adversely Impact Trade and U.S. Competitiveness

Washington, DC – The National Foreign Trade Council (NFTC), USA*Engage joined seven other prominent trade associations today to send a letter to Chairman of the House Energy and Commerce Committee John Dingell (D-MI) and other members of the committee, to urge them to explore fully the potential trade and World Trade Organization (WTO) related implications of legislative proposals aimed at addressing climate change. The associations sent the letter in response to the committee’s recent White Paper on various approaches to climate change. In addition to Chairman Dingell, the letter was also sent to Ranking Member Joe Barton (R-TX), Chairman of the Subcommittee on Energy and Air Quality Rick Boucher (D-VA) and the subcommittee’s Ranking Member Fred Upton (R-MI).

“Every nation in the international community has a shared interest in mapping a path forward on global climate change, and the United States has an opportunity to take the lead on these efforts,” said NFTC President and USA*Engage Co-Chair Bill Reinsch. “However, if we are to lead the international community in developing related laws and regulations, we must do so in accordance with WTO rules and multilateral commitments.”

In the letter, the trade associations discussed the importance of finding a global solution to climate change, and also expressed concern about the “adverse impact that some mechanisms could have on global trade, jobs and the competitiveness of U.S. industries.” For example, “If the United States were to impose emissions legislation that levied tariffs against certain goods from another country based on environmentally-unfriendly production practices, that country could respond by taxing all goods made in the United States by pointing to U.S. per capita CO2 emissions, which are dramatically higher than the world average,” wrote the associations.

The groups underscored the importance of ensuring that U.S. laws to address climate change are compatible with WTO rules, highlighting the potential consequences of incompatibility. “To the extent that U.S. climate change proposals do not adhere to basic WTO principles such as most–favored-nation and national treatment, they run the risk of being found to be inconsistent with our obligations and subject to permissible trade retaliation by other countries,” the groups stated in the letter.

Further, the associations noted that if the United States were to take action viewed by our trading partners as unilateral or discriminatory, countries might retaliate against U.S. exports, which would “impose substantial costs on American businesses and workers, and undermine the international economic opportunities that are vital to promote greater growth in the U.S. economy. Such actions would also make it more difficult to reach consensus on a multilateral approach to climate change.”
In closing, the associations encouraged members of the committee to work with the House Ways and Means Committee to further explore the international trade implications of proposed climate change legislation. Other signatories on the letter included the American Apparel & Footwear Association, the American Farm Bureau Federation, the National Retail Federation, the Retail Industry Leaders Association, the Travel Goods Association, the U.S. Council for International Business, and the United States Association of Importers of Textiles and Apparel.

In December 2007, the NFTC released a report, titled “WTO-Compatibility of Four Categories of U.S. Climate Change Policy,” which examines energy and climate related bills introduced in the 110th Congress from the perspective of their compliance with World Trade Organization (WTO) rules.
For a copy of the report, please visit http://www.nftc.org/newsflash/newsflash.asp?Mode=View&articleid=1917&Category=All.

USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.

The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.